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rantnrave

Halifax Up, Up & Away

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Al Jabeeba in reflective mood


Some housing market data from Halifax. House prices in the three months to July rose 3.6% from the three months earlier. Year-on-year, they are up 10.2%. After recording a decline in June, monthly house prices grew by 1.4% in July. "The latest Halifax Housing Market Confidence Tracker indicates that sentiment towards selling is growing," says the lender.

One thing to note on today's house price index from Halifax. The bank says the last time average annual property values increased by more than 10% was September 2007. The same month that people began to queue outside Northern Rock.

Edited by rantnrave

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Annectodetly I am also seeing in my local market flippers return. They take typically an old granny place, decorate and within 6months the listing reappears on Rightmove but 40K higher. It is not on the same scale (in my area atleast) as in 2006/7 shortly before the market crashed. If everone is buying on the expectations of extrapolating current hpi continuing.....

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From the front page of the forum today:

  • Debt And Housing Costs Make Young Worse Off Than Past Generations
  • Banks’ Credit Ratings Downgraded As State Bailout Guarantees Recede
  • Property Firm Abandons Listing

And...

  • Halifax Up, Up & Away

This has blow-off phase written all over it. Good, I can't wait to see this blow up in Georgie's face.

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Jesus wept. I was sure that would be down 5% this month.

All the BoE and government anti-propaganda and trying to talk down the mega bubble is nonsense...they need to raise rates and stop funding the banks.

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Annectodetly I am also seeing in my local market flippers return. They take typically an old granny place, decorate and within 6months the listing reappears on Rightmove but 40K higher. It is not on the same scale (in my area atleast) as in 2006/7 shortly before the market crashed. If everone is buying on the expectations of extrapolating current hpi continuing.....

Who's buying from the flipper....joey the f**king Kangaroo ?

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It is the right noise for the great unwashed, and some idiot thinking of buying. It is reports (however wayward) like this, that will paint the MPC into a corner, and actual do something. It is a shyte sandwich, and the first bite, crust only, taste normal.......

If I were a conspiracy theorist, which I am not, then the london market has started to crash after them talking down the market....now they need it to shoot up again.

They'd obviously not do that and the government and bankers can be trusted with our money/futures.

:blink:

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If I were a conspiracy theorist, which I am not, then the london market has started to crash after them talking down the market....now they need it to shoot up again.

They'd obviously not do that and the government and bankers can be trusted with our money/futures.

:blink:

Aren't Halifax much less involved in London and much more into the North? If so, then what we're seeing could be the North catching up to London, and drops in the capital not being represented.

Either way, I agree with Ali Kebab - this is a disaster for the VIs.

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but house prices are falling and have been for the last three/four months?

how is this possible?

Because the asking prices are 20% higher then last year so if they just drop a half of this then theyre still costing more.

Im not seeing anything that even tempts me where as this time last year there were a few places that i'd have possibly held my nose and bought.

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Aren't Halifax much less involved in London and much more into the North? If so, then what we're seeing could be the North catching up to London, and drops in the capital not being represented.

Either way, I agree with Ali Kebab - this is a disaster for the VIs.

yes, could be money exiting london

also, 3 of the last 5 months have seen negative growth

if we look at mays 4% increase as a blip the crash is well and truly on!

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Unless we have access to the raw data or know the details of the smoothing algorithm they're using it's just one made up number subtracted from another.

Both of the Haliwide liar indices were continuing to show +ve hpi well into 2008.

_47051420_house_prices_dec_466gr.gif

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FreeTrader has made the very plausible argument that Lloyds capping Help to Buy Equity loans at £150k may be intended to see if Lloyds can move the same business to the mortgage gaurantee part of the scheme as that is more profitable for the bank - this rests on the assumption that buyers are deposit constrained but have the income to make the payments on a larger mortgage, which seems very possible.

Running along side this, Lloyds could just be getting cold feet about these prices - after all a correction of more than 25% and the bank could have a problem with some of its weaker borrowers, regardless of the 20% equity loan - and as the Bank of England are stress testing at 35%, admittedly a 25% correction would be non-trivial, but it is certainly not impossible, and not even 'worst case'. In a time of falling prices the banks' protection against default by borrowers is shared between the asset (ultimately the house sales proceeds) and the income of the earners. If the banks' decide that they are not going to be allocating their 15% of borrowing at greater than 4.5x to the HTB2 mortgage guarantee lending, then 'Hey Presto!' a cap (OK - at 4.5x a pretty eye-wateringly high cap, but compared to the days of self-cert IO, which could easily have been at 7x or more, a non-trivial cap).

As reported in the press Lloyds have written about 50% of the equity loan business. The share of HTB1 mortgages which are over £150k will disproportionately be in London and the South East.

Finally, the method of preparation of the Halifax is to take a 'definition of a particular kind of house', for want of a better way of putting it, and then collate all the prices for that type of house. The index is not repeat sales, so new builds make it in- this is not true for the Land Registry which is repeat sales. (There is some hedonic regression so that the fact that houses get smaller over time is not inflationary.) I'm willing to take a punt on the idea that adding in lots of very frothy prices paid for new build financed by Lloyds Group companies using HTB equity loans and HTB mortgage guarantee will move the Halifax index in a way that it won't move the Land Registry.

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Guest

Who's buying from the flipper....joey the f**king Kangaroo ?

I guess they're "attempted" flippers. Will soon be sitting on a profit of sweet flip all. :)

Edited by Guest

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A flipper near me going for about £100,000. Bungalow sold for £193,500 in April, new kitchen, back on this week for £320,000

Let's hope for their sake they break even.... or only make a small loss :)

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A flipper near me going for about £100,000. Bungalow sold for £193,500 in April, new kitchen, back on this week for £320,000

My landlord (boomer in late 50's) tried that. The end result is me renting a newly refurbed bungalow in a nice area and him being landed with a problem.

His cheap refurb will last 5 years of rental usage before it needs refurbing again.

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yes, could be money exiting london

also, 3 of the last 5 months have seen negative growth

if we look at mays 4% increase as a blip the crash is well and truly on!

Given London prices, some sellers may not need a mortgage, when relocating and buying outside London.

Although I suppose even a small mortgage would register on Halifax's house price index,

I still hold any 'champagne flowover' effect, from successful London peak sellers actually selling up, perhaps being nochalant in offhandly setting a new peak in their move outside London, is very temporary. Would stop if/when London prices falls, and I don't accept the argument London sellers are set to whack up Sheffield house prices.

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Given London prices, some sellers may not need a mortgage, when relocating and buying outside London.

Although I suppose even a small mortgage would register on Halifax's house price index,

I still hold any 'champagne flowover' effect, from successful London peak sellers actually selling up, perhaps being nochalant in offhandly setting a new peak in their move outside London, is very temporary. Would stop if/when London prices falls, and I don't accept the argument London sellers are set to whack up Sheffield house prices.

I don't buy the champagne tower argument either. We didn't see it in 2008 why should we see it again now? Worse, post-2008 London prices have been driven largely by flippers and momo speculators not BTL numpties. If the housing market's turned decisively as an investment class then I wouldn't expect them to stick with it come what may.

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I don't buy the champagne tower argument either. We didn't see it in 2008 why should we see it again now? Worse, post-2008 London prices have been driven largely by flippers and momo speculators not BTL numpties. If the housing market's turned decisively as an investment class then I wouldn't expect them to stick with it come what may.

I know of several Londoners who sold up circa 2007/2008 and bought way over the odds in Swansea and on Gower - certainly helped the local EAs to inflate the local asking prices.

However, all of them were back on the market within a year or two when they worked out that they liked visiting for a few weeks but didn't really want to live here... or on Gower where it is ruddy miserable when it is cold, wet and grey - which is most of the time... and there they have stayed for years at the original silly price they paid PLUS, of course, 50K or a few hundred K more...

Problem is, the only way out is for them to sell to another Londonder mug downsizer. The locals can't afford it. The Premier footballers basically have rentals as part of their deal.

But those Londoner mugs helped the EAs to drive up the asking prices of everything right from the top of Swansea to the bottom.

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From today's Times.

It's good they have the luxury of a worried BoE about mortgage/consumer debt, for all this time to mull over selling at ridic high prices, especially owners at the higher end. Go-go HTB, and the pavement lickers.

20paexz.jpg

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